Tolling the Rhine in 1254: Complementary Monopoly Revisited

Introduction: Every year, millions of tourists, Colour Photoguide in hand, embark on a Rhine cruise. These tourists are touring not just picturesque historical landmarks but also the scene of interesting Nash equilibria. The castles and ruins mark the sites of former tolling stations along the Rhine River valley. History records that at one time or another during the millennium 800- 1800, 79 different locations served as toll booths along the Rhine and its tributaries. The Rhine River was the major commercial thoroughfare in Western Europe during this time, and Rhine customs and tolls were a major source of revenue for the Holy Roman Empire. As such, the Emperors closely guarded the right to collect tolls. Such a right could be granted only by the Emperor. For instance, one well-documented tolling station that operated continuously throughout the Middle Ages, Koblenz, first got this right in 1018. Formally, the right to collect a toll had to be renewed with each new Emperor, and renewal was not automatic.

Given a demand for Rhine travel, an Emperor faced a classic complementary monopoly problem: how many toll stations to have, where to site them, and what toll to charge at each. As a basic part of the answer to this problem, Emperors tended to keep the number of stations low. For instance, in 1250 – an important date in our analysis – there were 12 stations on the Rhine between Mainz and Cologne . Siting was a complicated decision, whose components included the local power structure (powerful ecclesiastical or noble interests were likely recipients), spacing (a 5 kilometer minimum seems to have been observed), and defensibility (some of the castles which acted as toll booths survived as military structures until the French invasion of 1689).

The standard toll for an average ship in 1241 was 8 denari (1 denarus equaled 0.68 grams of silver). Larger ships paid a larger toll. There are also records of in-kind tolls being collected, mainly in specific cargoes (lead, copper, wine, slaves) and mostly in the Lower Rhine Valley (today’s Netherlands). In-kind tolls tended to be much heavier than their monetary counterpart.